Mauritius - Economy

Economy

Since independence in 1968, Mauritius has developed from a low-income, agriculture-based economy to a middle-income diversified economy. The economy is based on tourism, textiles, sugar, and financial services. In recent years, information and communication technology, seafood, hospitality and property development, healthcare, renewable energy, and education and training have emerged as important sectors, attracting substantial investment from both local and foreign investors. Mauritius embarked on a multi-sector reform agenda in 2006 with the objective of improving the competitiveness of the economy. These reforms had considerable success in accelerating the rate of growth, reducing unemployment and speeding up the pace of diversification of the economy through the development of new sectors. The reforms created fiscal space to allow the authorities to perform a comprehensive, well-targeted, and temporary counter-cyclical policy in early 2009 to mitigate the negative impacts of the global financial crisis. The fiscal stimulus contributed to absorb the shock of the 2007/08 global crisis, which was reinforced in August 2010, with a second four percent of GDP stimulus package to cushion the impact of the European sovereign-debt crisis. Since 2010, the government embarked on a second generation reform program to continue improving Mauritius’ competitiveness as it transitions to more diversified export markets, ensuring also that inclusive growth reaches the entire population. Mauritius has no exploitable natural resources and therefore depends on imported petroleum products to meet most of its energy requirements. Local and renewable energy sources are biomass, hydro, solar and wind energy. Mauritius has one of the largest Exclusive Economic Zones in the world, in 2012 the government announced its intention to develop the Ocean Economy.

Mauritius has one of the most stable and successful economies in Africa and is ranked high in terms of competitiveness, investment climate, governance and freest economy, the Gross Domestic Product estimate was at $20.225 billion and GDP per capita income over $15,595 in 2012, one of the highest in Africa. Mauritius is a upper middle income economy with its GNI per capita at US$8,230 in 2011. For the fifth consecutive year, the World Bank’s 2013 Ease of Doing Business report ranks Mauritius first among African economies and 19th worldwide out of 183 economies in terms of ease of doing business. Mauritius has built its success on a free market economy, according to the 2012 Index of Economic Freedom, Mauritius leads Africa in economic freedom and is ranked 8th worldwide. The report’s ranking of 183 countries is based on measures of economic openness, regulatory efficiency, rule of law, and competitiveness. Mauritius is the largest foreign investor in India, FDI inflows to India, from April 2000 to December 2011 amounts to US$62,470.80 million which account for more than 39% of total inflow. Mauritius's real GDP growth rate remains strong although it is estimated to have marginally slowed down to 4.1% in 2011 from 4.2% in 2010, with projections showing moderate growth at 4.0% in 2012 as the euro area, the country’s main export destination, falls into another recession.

The rupee (sign: ₨; ISO 4217 code: MUR) is the currency of Mauritius. It is theoretically divided into 100 cents; however, as at October 2011, only 5 and 20 cent coins, are currently in circulation, the latest mintage of these two coins was in 2010. A Half Rupee coin is also in circulation. The rupee was established by law in 1876 as the local currency of Mauritius. The rupee was chosen due to the massive inflow of Indian rupees following Indian immigration to Mauritius. The Mauritian rupee was introduced in 1877, replacing the Indian rupee, sterling and the Mauritian dollar, with the Mauritian rupee equal to one Indian rupee or half a Mauritian dollar. The pound was worth 10¼ rupees at that time. The Mauritian currency also circulated in the Seychelles until 1914, when it was replaced by the Seychellois rupee at par. In 1934, a peg to sterling replaced the peg to the Indian rupee, at the rate of 1 rupee = 1 shilling 6 pence (the rate at which the Indian rupee was also pegged). This rate, equivalent to 13⅓ rupees = 1 pound, was maintained until 1979.